February 24th, 2010 by Reed Allmand 
A study released by TransUnion has revealed that a new “payment hierarchy” has emerged with debtors becoming more current on their credit cards while allowing their mortgage become delinquent.
Instead, the tendency to stay current on credit card payments and delinquent on mortgages has become more widespread. According to the study, the number of American consumers delinquent on mortgage payments but current on credit cards increased 68 percent from third quarter 2007 to third quarter 2009.
One of the main reasons that many debtors are choosing to risk foreclosure by paying credit card debt instead of their mortgage is because many mortgages are now underwater and some mortgage servicers are not cooperative in helping homeowners receive mortgage modifications. But debtors considering putting their money towards credit card debt while their home is at risk for foreclosure may be making their financial situation worse.
When a debtor’s home goes into foreclosure, it is still possible that they will end up owing the bank on their mortgage. With the depressed mortgage and housing industry, many homes are not selling for enough to cover the mortgage. And because of this, the mortgage company may go after the debtor for the balance of the mortgage even after a foreclosure sale. If you are a debtor who is choosing between paying your credit card debt and paying your mortgage, you may need to consider bankruptcy. Bankruptcy can discharge credit card debt and help you save your home from foreclosure.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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